To enter amounts from a Form 1099-G, Certain Government Payments, follow the steps below:
- Navigate to Screen 14.2 State Refund & Unemployment Comp., etc.
- Select the appropriate Form 1099-G on the left panel or click Add to create a new activity
- Enter the Name of Payer and General information
- Enter the amounts from Form 1099-G depending on type of payment such as unemployment compensation or state and local income tax refunds
- Complete these steps for each Form 1099-G received
If the Form 1099-G is received for Unemployment compensation (Box 1 of the Form 1099-G)
- Under the Federal Section, Unemployment Compensation subsection, in Total Received (1) enter the amount of unemployment compensation received from box 1 of Form 1099-G, even if the taxpayer repaid an overpayment.
- In 20XX Overpayment Repaid, enter the overpaid unemployment compensation received and repaid in that is included in Total Received (Screen 14.2, code 2). This amount prints as a footnote on Form 1040, with the description "Repayment." The program reduces the amount entered in Total Received by the overpayment repaid and prints the balance. If the unemployment compensation repaid is for a prior year, refer to the IRS instructions.
- In Government program contributions reduction (non-itemizers), enter an amount if applicable. Form 1040 instructions state than if the taxpayer made contributions to a governmental unemployment compensation program, and the taxpayer is not itemizing deductions, the amount reported as taxable unemployment compensation can be reduced by those contributions. This is based on Regulation 1.85-1(b)(1)(iii), which holds that if a governmental unemployment compensation program is funded in part by an employee's contribution which is not deductible by the employee, an amount paid to such employee under the program is not to be considered unemployment compensation until an amount equal to the total nondeductible contributions paid by the employee to such program has been paid to such employee. If the taxpayer is not itemizing, and contributed to such a program, enter the amount of contributions. The amount is subtracted from the entry in Unemployment Compensation and the result is included on Form 1040.
If the Form 1099-G is received for State or Local Income Tax Refunds, Credits or offsets (Box 2 of the Form 1099-G)
- Under the section titled Federal, State and Local Refunds subsection, enter the Income Tax refunds, credits or offsets from Box 2 of Form 1099-G.
- In Refunds Attributable to post-20XX ES/extension payments (code 7), if applicable, enter the amount of prior year state and local income tax refund attributable to payments made after 12/31/20XX. Refer to IRS Publication 525 for more information regarding the amount to enter here. If this return was transferred to the current year using the prior year program, the amount is automatically carried to this field. The amount entered reduces the taxable amount of refund entered in State and Local Income Tax Refund, Credit or Offsets (2) (Screen 14.2, code 4), and also reduces the amount of state and local income tax deduction of federal Schedule A.
- If applicable, check City or Local Income Tax Refund, if this Form 1099G item is a refund of city or local (not state) income taxes. The entry is necessary for certain state returns that must differentiate between a state income tax refund and a city or local income tax refund. As an example, the state of Oregon does not tax Oregon income tax refunds, but taxes income tax refunds from Oregon localities.
- Enter an amount in Property tax refunds if received. Entries are also required in the State and Local Tax Refund Worksheet input section of Screen 14.2 to determine the taxable amount of the property refund. If this return was transferred from the prior year's Lacerte program, the property tax refund amount(s) were carried here automatically, as well as the amounts for the State and Local Tax Refund Worksheet. The taxable amount of property tax refunds is treated as an itemized deduction recovery and reported on Form 1040 as "Other Income," per IRS Publication 525.
- If this Form 1099-G was issued for a state and local income tax refund, and there is a tax year other than the most recent prior year in box 3, enter the year from box 3 in YYYY format in Tax year for box 2 if not 20XX (3). The refund entered on this 1099-G will be included in the state tax refund worksheet in the computation of the amount of refund that is taxable this year. The taxable amount of refunds may need to be overridden in this situation. Refer to Pub. 525 for more information regarding refunds received from a year other than 2010.
- Under the Form 1099-G section on the left hand column "State Refund Wksht" line in blue.
Or click on the "State Refund Wksht" button located at the upper left hand corner of the detailed portion of the input.
- Complete the entries under Refunds Taxable in 20XX Worksheet. This information transfers automatically from the prior year during the proforma process.
- Itemized in 20XX check box - If the taxpayer did not itemize deductions in the prior year, it is not necessary to make entries here - none of the state or local tax refunds, or property tax refunds entered in the Form 1099-G will be taxable.
- The program assumes that the greater of State and local income taxes paid (screen 14.2, code 105) or Allowable general sales tax deduction (screen 14.2, code 110), was deducted on the prior year's Schedule A. If the lower of the two amounts was deducted, an entry in this field will override the program's automatic calculation. If income tax was deducted even though the sales tax deduction was higher, enter numeric 1 in this field. If sales tax was deducted even though the income tax deduction was higher, enter numeric 2 in this field.
- Amounts from 20XX Return - Enter amounts from the prior year tax return if the taxpayer itemized deductions in the prior year and received a state or local income tax refund or a property tax refund. The amounts entered in these input fields are used with state and local refunds and property tax refunds entered in the Form 1099-G input section, to compute the amount of prior year refunds that are taxable in the current year.
Note: Entries in the "Income tax refunds, if itemized last year [O]", code 20 will override the 1040, line 10 and suppress the worksheet and any automatic calculations
- Box 4 Federal Income Tax Withheld - Enter the amount of federal income tax withheld from box 4 of Form 1099-G in Federal Income Tax Withheld (4) (code 6). The amount will be included as withholding in the payments section of Form 1040.
- Box 5 ATAA/RTAA payments - Enter the amount ATAA payments reported on Form 1099-G box 5 in AATA payments (5) (code 25). The amount entered is included on the other income line of Form 1040
- Form 1099-G may also be used for payments received on Commodity Credit Corporation (CCC) loans.
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